This disclosure relates to a system and method for implementing a customer loyalty program and more particularly to a system and method for implementing a mobile loyalty program through the use of a cellphone, smart phone, or other telecommunications device that prevents fraudulent redemption of a reward.
Customer loyalty programs are used by merchants and businesses to retain customers. It is typically less expensive to retain a customer than to attempt to attract a new customer. Some examples of the types of loyalty programs established by merchants require a customer to have a punch card, a gift card, or a debit-type card. Every time a customer visits the merchant and makes a purchase the card will be credited for the purchase. However, such programs have problems in that the customer must always remember to bring the card to the merchant when a new purchase is being transacted. If the customer forgets to bring the card then some loyalty programs allow the customer to enter the transaction via the Internet. However, the customer must take the time to enter the information. Forgetting or losing the card and not being credited for the purchase may have an adverse impact on the customer and the loyalty program.
Another type of loyalty program consists of a coupon being printing on the back of a receipt of a customer. For example, a grocery store will print out a coupon that requires the customer to return to the store to use the coupon on another purchase. However, this type of loyalty program requires the customer to remember about the coupon and to bring the coupon back to the grocery store. If the coupon is not used this may defeat the whole purpose for the loyalty program.
In order to avoid some of the problems associated with these loyalty program, one loyalty program that has been suggested uses a smart phone or other mobile device to interact with a computerized loyalty system. In the proposed system, a customer downloads a loyalty program application onto the smart phone and uses the application to join the loyalty program and to interact with the loyalty program. When a customer enters into a transaction at a merchant that is running the loyalty program, a code image, such as an QR (Quick Response) code is generated for the particular customer to use to record a credit in the loyalty program. The QR code must be generated for each customer for each transaction. Once the QR code is generated the QR code may be photographed or scanned by the smart phone and this code may be sent to a loyalty system server associated with the merchant. The loyalty system server uses the transmitted information to credit the account of the customer. Although such a system may be useful, one problem associated with its use is that there is no fraud prevention mechanism available or built into the system to prevent multiple redemption of a single reward.
Therefore, it would be desirable to have a mobile loyalty system that prevents fraudulent redemption of a reward. For example, it would be advantageous to have a mobile loyalty system that prevents fraudulent redemption of a reward being offered by a merchant by alerting the merchant that the reward has been redeemed. It would also be advantageous to have a mobile loyalty system that does not require the generation of QR codes for each individual customer for each individual transaction.